Opinion
No. 1251 C.D. 2014
06-05-2015
Shane Martin, Petitioner v. Insurance Department, Respondent
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE LEADBETTER
Shane Martin petitions for review of the final order of the Insurance Commissioner that affirmed the decision of the Insurance Department, which determined that the provisions of the Act commonly known as "Act 68," Act of June 17, 1998, P.L. 464, No. 68, as amended, 40 P.S. §§ 991.2001 - 991.2011, were not applicable to the expiration of Martin's motor vehicle insurance policy with Progressive Specialty Insurance Company. We affirm.
Martin had automobile insurance with Progressive from 2007 through August 11, 2013. Martin acknowledges that in July 2013, he received a renewal notice from Progressive. Martin went to Progressive's website to pay his full six-month premium. Apparently, the transaction failed and Progressive never received payment. Martin was unaware of the transaction's failure until he was in an accident in December 2013. When Martin called to report the accident, Progressive informed him that he did not have coverage because his policy had lapsed due to a failure to pay the premium.
Martin requested that the Department's Bureau of Consumer Services review Progressive's policy determination. The Bureau issued an investigative report concluding that the provisions of Act 68 did not apply to the non-renewal of Martin's policy. Martin appealed the Bureau's determination and requested an administrative hearing. At the hearing, Ibolyka Kaufman, a Progressive underwriting processor, and Martin testified.
Kaufman testified that Martin had signed up to receive communications from Progressive via email. She testified that on July 4, 2013, Progressive sent a policy renewal to Martin via email. Kaufman was unable to testify as to the email address that the renewal notice was sent to and unable to produce any documents showing the time and date the email was sent. Kaufman testified that on July 26, Progressive sent Martin via email a reminder that his policy expired on August 11. Kaufman stated that on August 14, Progressive sent Martin an email that his policy had not been renewed. Kaufman testified that if an email is sent to an invalid address, Progressive receives a non-delivery report and then sends the documents by United States Postal Service. Progressive did not receive a non-delivery report for the emails sent to Martin.
Martin testified that in July 2013, he received a renewal notice from Progressive in the U.S. mail. He then went to Progressive's website to pay his premium with his credit card. He testified that he thought the transaction went through, but did not receive a confirmation number or confirmation email and did not carefully review his credit card statement to confirm that the transaction had been completed. He testified that he did not receive any email communications from Progressive. Martin stated that when Progressive notified him in December 2013 that his policy had lapsed, he immediately obtained new insurance with another carrier. Martin also testified that Progressive informed him that it had called him to notify him of the policy lapse, but that he never received a phone call from Progressive.
On June 23, 2014, the Insurance Commissioner issued an adjudication and order affirming the Department's determination that the provisions of Act 68 did not apply to the expiration of Martin's policy and that Progressive lawfully terminated Martin's policy. The Insurance Commissioner noted that provisions of Act 68 govern the cancellation or non-renewal of a motorist's insurance policy, but that the provisions of Act 68 do not apply "[i]f the insurer has manifested its willingness to renew by issuing or offering to issue a renewal policy, certificate or other evidence of renewal or has manifested such intention by any other means." Section 2002(c)(1) of Act 68, 40 P.S. § 991.2002(c)(1). Based on Martin's testimony that he received a renewal notice from Progressive in the mail, the Insurance Commissioner concluded that the record established that Progressive sent Martin a renewal notice. Commissioner's Opinion at 4. The Insurance Commissioner stated that Martin knew or should have known the consequences of a failure to pay his premium. Id. at 5. The Insurance Commissioner concluded that it was Martin's own inattentiveness that led to lapse of his policy and that such behavior does not justify a failure to pay the premium. Id.
Martin asserts that Progressive failed to send him a notice of cancellation or a refusal to renew as required by Section 2006 of Act 68, 40 P.S. § 991.2006, and that the Commissioner erred in holding that the provisions of Act 68 did not apply to his insurance policy. Under the facts of this case, we disagree. Act 68 provides a comprehensive regulatory scheme for the issuance, renewal, cancellation and refusal of automobile insurance. However, Act 68 states that:
(c) Nothing in this article shall apply:
40 P.S. § 991.2002(c)(1). The Department's regulation implementing Section 2002(c)(1) provides:(1) If the insurer has manifested its willingness to renew by issuing or offering to issue a renewal policy, certificate or other evidence of renewal or has manifested such intention by any other means.
Some insurers affect a renewal of their outstanding policies of automobile insurance merely by sending a renewal premium notice to the insured...The insured need only make a timely payment of the premium due in order to keep his policy in force. In such a situation the mailing by the insurer of the renewal premium notice does constitute such a manifestation of willingness by the insurer to renew as to come within the purview of section [2002(c)(1)]. If the insured fails to pay the renewal premium when due, the policy shall terminate in accordance with its terms. No further notice to the insured by the insurer of an intention not to renew for nonpayment of premium shall be necessary.31 Pa. Code § 61.10(a).
Progressive manifested its intent to renew Martin's policy by sending him a renewal notice. Martin acknowledged receiving the renewal notice via U.S. mail. The policy lapsed as a result of Martin's failure to pay his premium. Thus, we agree with the Commissioner that the provisions of Section 2006 are not relevant to this case because Section 2002(c)(1) relieved Progressive of its obligation to provide a notice of cancellation.
Martin argues that Section 5(c)(1) of the Unfair Insurance Practices Act (UIPA), 40 P.S. §§ 1171.5(c)(1), required that Progressive mail the renewal notice to him at least 30 days prior to the expiration date of the policy and that Progressive failed to establish that it complied with the UIPA. Martin's reliance upon Section 5 of the UIPA is misplaced. The Department's regulations specifically exclude automobile insurance policies from the protections found in the UIPA. 31 Pa. Code § 59.2 (stating that this chapter applies to policies of insurance covering owner-occupied private residential properties or personal property, excluding automobiles covered under Act 68); 31 Pa. Code § 59.3 (defining policies covering personal property to exclude policies for automobile insurance covered by Act 68).
Act of July 22, 1974, P.L. 589, as amended.
Martin further argues that because Progressive used email to communicate with him, it was required to establish that it provided proper notice pursuant to the provisions of the Electronic Transactions Act. While we agree that Progressive completely failed to present evidence that it sent its email communications to the email address Martin registered with Progressive, Martin testified that he received the renewal notice via U.S. mail. Therefore, the provisions of the Electronic Transactions Act are not applicable to this case.
Act of December 16, 1999, P.L. 971, as amended, 73 P.S. §§ 2260.101 - 2260.5101.
The Department argued that Martin waived his arguments regarding the UIPA and the Electronic Transmissions Act because he failed to raise them before the hearing examiner. This argument is without merit. Martin specifically reserved the option to file a brief. Reproduced Record at 67a; Notes of Testimony at 63. The Insurance Commissioner failed to provide Martin with the opportunity to file a brief and erred in stating that "the parties waived briefing." Commissioner's Opinion at 2. The Insurance Commissioner's error is harmless, however, because we have addressed Martin's arguments in this opinion. --------
Finally, Martin argues that even if the Insurance Commissioner did not err in concluding that Act 68 was inapplicable, he is entitled to relief on equitable grounds. Martin contends that he never received any emails from Progressive regarding his policy and, therefore, was prejudiced by a lack of notice regarding his lapsed policy. Martin asserts that he was a diligent customer who paid his premiums on time until he signed-up for Progressive's paperless billing system. He notes that Progressive insists that it sent him communications via email, which he never received, while denying it ever sent a policy renewal via U.S. mail, which did occur. Martin also states that he never received any phone calls from Progressive regarding his policy, yet he was informed by Progressive customer service that the company had contacted him by telephone.
While we sympathize with Martin's frustration with Progressive, equitable relief is not appropriate. Progressive issued a policy renewal notice, which Martin acknowledged receiving and attempted to pay. Once Martin became aware of his need to pay the premium, it was his responsibility to ensure that he paid the premium in order to maintain his coverage. It was within Martin's ability to confirm whether he had coverage by carefully checking his credit card statement, which he did not do. This case contains instances of failures by both the insured and the insurer and, consequently, equitable relief is not available.
For the foregoing reasons, we affirm.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge Senior Judge Colins dissents. ORDER
AND NOW, this 5th day of June, 2015, the order of the Insurance Commissioner, Michael F. Consedine, is hereby AFFIRMED.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge